This report period has been concerned with performing an analysis of the air entrainment process associated with a plunging liquid jet. In particular, a linear stability analysis was successfully performed. The salient results of this work are contained in the enclosed draft technical paper entitled: 'The Analysis of af Plunging Liquid Jet - The Air Entrainment Process'. It appears that there has been a misunderstanding on the part of the computer staff at Stennis Space Center concerning the cost of PHOENICS 1.6. I believe that I have now clarified the situation. In particular, I have told them that CHAM LTD has waived all fees associated with their use of the PHOENICS 1.6 code.